Just looking for confirm something. I just spoke to Vanguard regarding Trust Services, specifically Trustee, Executor, and POA. I was told they will act as Trustee for the investments, but not Executor or POA. Last time I had my will updated (several years ago) my attorney spoke to them and was under the impression they would act as Executor but not POA. Only reason I am asking here is my call this morning included about 20 minutes on hold and a refusal to allow me speak directly to someone in the Trust Dept. Has anyone broached the subject of Executor with Vanguard Trust Services? Thanks

I have a Special Needs Trust that I set up for my special needs daughter. It is currently unfunded (it is a beneficiary of my taxable account) , but I had my lawyer put in all the language Vanguard wanted. I dealt extensively with the Trust Department at Vanguard which is how I learned of all their requirements. They sent me an email confirming that my Trust met their requirements. They will not serve as executor or POA. They will serve as Trustee but really prefer another family member as co Trustee if possible.

In all my years in the trust business associated with five major corporate fiduciaries, I never knew of any that would accept a POA from a client. We often performed much of the same function as trustee of a RLT, a much better and well defined relationship.
Gill

Cost basis is redundant. One has a basis in an investment |
One advises and gives advice |
One should follow the principle of investing one's principal

The problem comes when there are retirement assets. There is no way to get them into the trust will the grantor is alive. That means someone would need to serve as attorney in fact if the person cannot or does not want to manage the retirement funds themselves. I could understand someone wanting the same fiduciary that handled their RLT also having POA.

We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either |
--Swedroe |
We assume that markets are efficient, that prices are right |
--Fama

Appreciate the responses. Finding a firm to invest money if one is incapacitated in not difficult. Not saying there is no difference in who you choose. However finding a person or firm to handle Executor or POA is not easy if you have no children or younger relatives. The friend I considered using died last week so I'm looking for a firm or attorney, I guess, to do it. We've had several situations in my area with attorneys caught dealing inappropriately with funds for special needs, or other type, trusts, so I'm hesitant about using an attorney.

Hoping Gill will comment, but I think serving as executor, for a price, is something corporate fiduciaries usually do. It is just Vanguard that will not do it.

POA is another matter.

If I did not have an individual I could trust and the need would be at some undefined time in the future I would probably prefer a trust department to an attorney. Individual attorneys retire, law firms sometimes dissolve or get out of the estate planning business. A trust department is much more likely to stick around and this work is right up their alley.

We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either |
--Swedroe |
We assume that markets are efficient, that prices are right |
--Fama

Hoping Gill will comment, but I think serving as executor, for a price, is something corporate fiduciaries usually do. It is just Vanguard that will not do it.

POA is another matter.

If I did not have an individual I could trust and the need would be at some undefined time in the future I would probably prefer a trust department to an attorney. Individual attorneys retire, law firms sometimes dissolve or get out of the estate planning business. A trust department is much more likely to stick around and this work is right up their alley.

Yes, virtually all corporate fiduciaries act as personal representative of estates (executor), but Vanguard has chosen to limit themselves to acting as trustee. I would guess the reason is their inability to qualify as PR in all states because they only have the one office in PA.

You are correct that corporate fiduciaries offer perpetual existence, financial responsibility, group judgment, impartiality, accessibility as well as collective experience. There is no other entity or person that can offer the same.
Gill

Cost basis is redundant. One has a basis in an investment |
One advises and gives advice |
One should follow the principle of investing one's principal

Being an executor or POA seems to me to be a "boots on the ground" job. Investing or distributing money is easy. But do you expect Vanguard to arrange your funeral, clean out your house or apartment, call your utilities to let them know you no longer need the utilities, provide information for the death certificate and request copies, or find a lawyer to represent you in court (probate or another case), and collect your mail to find what bills you owe and give tax forms to a tax preparer? Someone still has to take out the trash, locate the latest will/trust and notify the beneficiaries, do something with the pets, etc. How do you expect Vanguard or a corporate trustee to do that?

If I did not have an individual I could trust and the need would be at some undefined time in the future I would probably prefer a trust department to an attorney. Individual attorneys retire, law firms sometimes dissolve or get out of the estate planning business. A trust department is much more likely to stick around and this work is right up their alley.

You are correct that corporate fiduciaries offer perpetual existence, financial responsibility, group judgment, impartiality, accessibility as well as collective experience. There is no other entity or person that can offer the same.

Corporate trustees may intend to be perpetual, but they can go out of business like any other company. I've often told the story about the trust we originally had written. Besides having a succession of about 8 relatives be the next successor trustee, the lawyer strongly recommended we end the list with a local corporate trust company. The reasoning was that our relatives could move, die, or otherwise be unable to serve, while the trust company would always be there for us.

Fast forward 25 years. I was reading the trust and all our relatives were still alive and living at the same address that was noted in the trust. Then I decided to google the local trust company. I couldn't find them. It appeared they went under and were bought out by another trust company.. But that company no longer existed either. I assume the 2008 financial meltdown ended one or both of them while my relatives were still dependable, have collective wisdom of extended family dynamics, and have experience with caring for our elderly relatives, both financially and medically. We are slowing sharing this with the next generation who will have to take care of us.

Being an executor or POA seems to me to be a "boots on the ground" job.

Someone still has to...…., locate the latest will...…..

Correct me if I'm wrong, but doesn't the will have to be filed with the courts before an executor can be formally appointed? I'm not being nit picky, as this can sometimes be a meaningful concern where there is mistrust among heirs. Until an executor is named, I don't believe that anybody can legally take possession of a decedent's property (including their home). If said decedent fails to provide advance access (i.e. a key and perhaps at least verbal instructions), then how would anybody be able to legally enter their home to find the last will? It's kind of a chicken and egg scenario.

Maybe there are laws that address this concern. I am aware of at least one situation where communication between an elderly person and an adult child is very poor in this area and other potential heirs are extremely distrustful; to the point at which there might be later accusations of "breaking and entering" and "theft." Until a will is filed, the person nominated as executor can't be formally appointed; and until an executor is appointed, nobody may really have legal access to find the will. Does that make sense?

I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

Being an executor or POA seems to me to be a "boots on the ground" job.

Someone still has to...…., locate the latest will...…..

Correct me if I'm wrong, but doesn't the will have to be filed with the courts before an executor can be formally appointed? I'm not being nit picky, as this can sometimes be a meaningful concern where there is mistrust among heirs. Until an executor is named, I don't believe that anybody can legally take possession of a decedent's property (including their home). If said decedent fails to provide advance access (i.e. a key and perhaps at least verbal instructions), then how would anybody be able to legally enter their home to find the last will? It's kind of a chicken and egg scenario.

You make a good point and I'm just guessing here. But if the POA is a DURABLE POA (lasting after death), would that person be able to enter and look for the will?

Or it might be smart for the person to give a copy of the will to the executor before they die. It can even be in a sealed envelope, if they want it opened only after their death. If you can't trust your executor to do this, maybe they shouldn't be the executor.

Being an executor or POA seems to me to be a "boots on the ground" job.

Someone still has to...…., locate the latest will...…..

Correct me if I'm wrong, but doesn't the will have to be filed with the courts before an executor can be formally appointed? I'm not being nit picky, as this can sometimes be a meaningful concern where there is mistrust among heirs. Until an executor is named, I don't believe that anybody can legally take possession of a decedent's property (including their home). If said decedent fails to provide advance access (i.e. a key and perhaps at least verbal instructions), then how would anybody be able to legally enter their home to find the last will? It's kind of a chicken and egg scenario.

You make a good point and I'm just guessing here. But if the POA is a DURABLE POA (lasting after death), would that person be able to enter and look for the will?

I believe that POA ends the moment of death in all cases and that "durable" typically means that it continues after a person becomes incapacitated.

Or it might be smart for the person to give a copy of the will to the executor before they die. It can even be in a sealed envelope, if they want it opened only after their death. If you can't trust your executor to do this, maybe they shouldn't be the executor.

Smart, wise, professional and many other things. That said, some people get really funny about this stuff. In the situation I alluded to earlier, the elderly person refuses to even discuss the terms of their will with the very same person that they're expecting to serve as executor. I personally am of the opinion that anybody with responsible adult children should make their estate planning documents available to all, including both named executors and others. They don't need to share the value of their assets, but should at least share a summary of what the assets consist of and where details can be found. Expanding on your point, if you can't trust your own responsible adult children, who can you trust?

I am not a lawyer, accountant or financial advisor. Any advice or suggestions that I may provide shall be considered for entertainment purposes only.

We have a responsible relative of the same generation as both attorney in fact , successor trustee and executor with an adult child as successor to the older person. Assuming that the adult child will actually do the work with the older person providing experience and advice. No secrets.

Both have a complete set of our estate planning documents and a statement containing all of our account information. They also have the contact information for our estate planning attorney, who also has originals of all the documents.

They all know about the option of using Vanguard for those services it will provide. I have told them they should also consider Schwab, which will hold real estate while Vanguard will not.

We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either |
--Swedroe |
We assume that markets are efficient, that prices are right |
--Fama

I have considered using Vanguard Trust as the trustee as well. After I told my estate planning attorney my intention, here is his response. To tell you the truth, I don't quite understand what he is saying.

"As for the choice of Trustee, based on your comments, I would go with xxx who only handles the fiduciary / administrative part of the job, and you choose the financial advisor. Choosing a brokerage house who only really has a trust company in order to get the investment advisory work limited to marketable securities is not a good way to go. But, you can choose them to do the investment advisory work that they really want to do."

Last edited by Amy2017 on Sat Aug 25, 2018 1:20 pm, edited 1 time in total.

I have considered using Vanguard Trust as the trustee as well. After I told my estate planning attorney my intention, here is his response. To tell you the truth, I don't quite understand what he is saying.

"As for the choice of Trustee, based on your comments, I would go with Cumberland Trust who only handles the fiduciary / administrative part of the job, and you choose the financial advisor. Choosing a brokerage house who only really has a trust company in order to get the investment advisory work limited to marketable securities is not a good way to go. But, you can choose them to do the investment advisory work that they really want to do."

My impression of what he is saying is that he doesn’t understand Vanguard. He is suggesting you choose another company as trustee and use Vanguard as the investment advisor. I think it is a stupid suggestion. He obviously doesn’t understand how Vanguard operates.
Gill

Cost basis is redundant. One has a basis in an investment |
One advises and gives advice |
One should follow the principle of investing one's principal

In one of bsteiner's posts, he mentioned that "If there are assets other than securities and mutual funds, a conventional corporate trustee will be able to deal with them, but Vanguard (or a similar institution) can't. That could be an issue if your children (or their guardian if they're minors) want to retain your home, or when the children are adults and for some reason it makes sense for their trusts to buy homes for them."

Since I specifically told my attorney we don't want to have our home sold while our children are still minors, could that be the reason my attorney suggested this way? We have quite a few rental properties. Initially my attorney said many trustee companies prefer not to hold real estates for long-term. So we told him we could have all rental properties sold by the corporate executor to make life easier for everyone. I am very new to this whole executor and trustee things. Since Vanguard could not act as an executor, do you think we could hire some local trust company, such as the one suggested by my attorney, as a corporate executor only, then later handle all assets to Vanguard Trust so they could act as Trustee? Will retaining family home a big obstacle to this solution?

Since Vanguard could not act as an executor, do you think we could hire some local trust company, such as the one suggested by my attorney, as a corporate executor only, then later handle all assets to Vanguard Trust so they could act as Trustee? Will retaining family home a big obstacle to this solution?

Vanguard will not serve as trustee for your home. They do not do real estate. If you want to keep the family home Vanguard cannot help. If you have the local bank serve as trustee long term to hold the house, then you also have to keep enough assets there so that they can charge their fees. That means you would have two separate trust companies.

The simplest would be to have the bank recommended by your lawyer handle everything. If they would charge too much to do the whole thing, that is the only reason I could see to have the bank do the administrative work while Vanguard handles the investing.

We don't know how to beat the market on a risk-adjusted basis, and we don't know anyone that does know either |
--Swedroe |
We assume that markets are efficient, that prices are right |
--Fama

I have considered using Vanguard Trust as the trustee as well. After I told my estate planning attorney my intention, here is his response. To tell you the truth, I don't quite understand what he is saying.

"As for the choice of Trustee, based on your comments, I would go with Cumberland Trust who only handles the fiduciary / administrative part of the job, and you choose the financial advisor. Choosing a brokerage house who only really has a trust company in order to get the investment advisory work limited to marketable securities is not a good way to go. But, you can choose them to do the investment advisory work that they really want to do."

My impression of what he is saying is that he doesn’t understand Vanguard. He is suggesting you choose another company as trustee and use Vanguard as the investment advisor. I think it is a stupid suggestion. He obviously doesn’t understand how Vanguard operates.
Gill

This seems a bit harsh. I think he is saying that he trusts Vanguard to be a good investment manager, but does not trust Vanguard to do a good job of handling the administrative functions of a trustee. That's no different than a thousand comments you'll find on Bogleheads, lauding Vanguard as an investment manager but criticizing its customer service. I don't necessarily agree with those comments, but they don't indicate a lack of familiarity with Vanguard.

He's recommending that his client de-couple the investment functions from the admin functions by appointing a trustee that handles only the admin functions (and delegates investment to Vanguard). Similar to advice some Bogleheads give to hold their accounts at Schwab or E-trade or wherever and buy Vanguard ETFs. I don't follow that advice myself, but I wouldn't say that it is "stupid."

Last edited by Eric on Sat Aug 25, 2018 2:14 pm, edited 1 time in total.

Vanguard will not serve as trustee for your home. They do not do real estate. If you want to keep the family home Vanguard cannot help. If you have the local bank serve as trustee long term to hold the house, then you also have to keep enough assets there so that they can charge their fees. That means you would have two separate trust companies.

The simplest would be to have the bank recommended by your lawyer handle everything. If they would charge too much to do the whole thing, that is the only reason I could see to have the bank do the administrative work while Vanguard handles the investing.

He did mention another full service trust company, which charges 1.2%. The local trust company he strongly recommends only does trust administration. Here is what it said on its website. "xxx acts as a truly independent trust company. We are not investment advisors and focus our efforts solely on trust administration."

I am now inclined to take his recommendation and have this company work on trust administration and Vanguard on investment advisors. The total cost will be 0.8% to 0.9%.

VTS works with the executor or person with power of attorney if one is becoming senile. We had several family members as executor over the years who either dropped out, or began deciding how to spend our money! So our attorney is our executor now. Great relief too.

SeeMoe..

"By gnawing through a dike, even a Rat can destroy a nation ." {Edmund Burke}